The Complete AAP™ Training Manual

AAP Basics

AAP Basics

My Company is a New Federal Government Contractor; Where Do I Start?

Whether your company has never been required to have an affirmative action plan, or if it is just now finding time to address its affirmative action obligations, there are some actions you must take immediately and others that may take some time to implement.

Implement Immediately

  • Begin soliciting identification of:
  • Begin tracking employment activities:
  • Inform your company recruiters and all levels of management of your company’s obligation to take affirmative action to recruit members of protected groups.

  • Incorporate EOE clause in help wanted postings:
    • [Company] is an equal opportunity employer. All qualified applicants will receive consideration for employment without regard to race, religion, color, national origin, sex, sexual orientation, gender identity, age, status as a protected veteran, among other things, or status as a qualified individual with disability.

  • Send notice to Employment Service Delivery System (ESDS) to inform them of your intent to post all positions except those exempt; the following types of positions are exempt from the requirement to be posted with the ESDS:
    • high-level management and executive positions
    • positions lasting fewer than 3 days
    • positions intended to be filled only from within the organization

*Visit Circa for a listing of ESDS in your state.

Begin Considering

Start thinking of the following, and consider getting them into place sooner than later:
  • Review accessibility for individuals with disabilities in physical and virtual environments; e.g. virtual refers to website sight/hearing impaired alternatives.
  • Establish disability accommodation policies; see an example at SHRM’s website.

Use an Annual Implementation Checklist
Download an Implementation Checklist each year after completing your annual affirmative action plan to ensure that you’re maintaining compliance with affirmative action regulations.


Why Must My Company Prepare an Affirmative Action Plan?

If your company holds contracts with the federal government, it is subject to affirmative action regulations. If it meets the criteria on both size and contract amount, it must develop a written affirmative action program (AAP).

Jurisdictional Thresholds

Women & Minorities

The regulations under CFR 60-2.1(b) indicate that, “Each nonconstruction contractor must develop and maintain a written affirmative action program for each of its establishments if it has 50 or more employees and…”

  • a contract or $50,000 or more,
  • bills of lading totaling $50,000 or more, or
  • is a financial institution that is an issuing and paying agent for U.S. savings bonds and notes in any amount.


Protected Veterans

Under VEVRAA, which covers affirmative action programs for protected veterans, CFR 60-300 indicates that a written affirmative action program must be developed by federal contractors with 50 or more employees and

  • a contract of $150,000 or more.


Individuals with Disabilities

Under Section 503, which covers affirmative action programs for individuals with disabilities, CFR 60-700 indicates that a written affirmative action program must be developed by federal contractors with 50 or more employees and:

  • a contract of $50,000 or more.

    The DOL has a handy visual guide that you can present to managers who question why your company must comply with OFCCP, Section 503, and VEVRAA regulations.

Origin of Affirmative Action for Federal Government Contractors

As taxpayers, everyone, including minorities, women, veterans, and individuals with disabilities ultimately fund government contracts. At one point in history, it was perfectly allowable for federal contractors compensated by taxpayer money to refuse to hire individuals in these now-protected groups. In a manner, this discrimination amounted to a new variant of taxation without representation. In recognition of this injustice, Title VII of the Civil Rights Act of 1964 was enacted to prohibit employment discrimination based on race, color, religion, sex, or national origin; however, though employers were prohibited from discriminating against protected groups, neither were they clamoring to recruit individuals in these protected groups. Executive Order 11246 and other legislation aimed to address the topic of recruitment.

A Brief History

  • Executive Order 11246 signed in 1965 by Lyndon B. Johnson not only prohibits discrimination, but also mandates that government contractors take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color, or national origin.
  • Executive Order 11375 signed in 1967 bans discrimination on the basis of sex in hiring and employment in both the U.S. federal workforce and on the part of government contractors.
  • Rehabilitation Act of 1973 prohibits discrimination against individuals with disabilities, and mandates that government contractors take affirmative action to hire, retain, and promote qualified individuals with disabilities.
  • Vietnam Era Veterans’ Readjustment Assistance Act of 1974 prohibits discrimination against veterans, mandates that government contractors take affirmative action to employ and advance in employment specified categories of veterans, and mandates that government contractors list their employment openings with state employment offices
  • Related: Executive order 13672 prohibits discrimination based on sexual orientation or gender identity, but does not mandate affirmative action.


Codes of Federal Regulations

The Complete AAP software meets the requirements set forth by the regulations governing affirmative action:




Establish Your AAP Dates

Knowing which data to pull depends entirely on what your company’s affirmative action plan (AAP) dates are, so you must establish your AAP year before moving forward.

Your company’s first AAP should be completed within 120 days of the original contract date, and must be updated annually.
41 CFR §60-2.1( c), §60-741(b)(2), §60-300.40(b)

What is the Start Date of My AAP?
The start date of your AAP year should fall within the first 120 days of the execution of the initial covered government contract, but it may be difficult to locate that information, so if the date is unknown, the OFCCP suggests picking a date in your company’s peak employment period. Most companies choose a calendar year, which begins on January 1. You can choose any date in any month as your start date.
What is the End Date of My AAP
One of the most confusing aspects of affirmative action is the year an AAP should cover. One way to remind yourself is to think of the plan in affirmative action plan; it is impossible to plan for the past, so your AAP is a plan for the future year. Your AAP year begins on the start date that you establish when considering the execution of the federal contract. As mentioned above, the most popular AAP year begins on January 1. The end date of your AAP year on non-leap years should be 364 days after the beginning date (e.g. January 1 to December 31). Our online AAP Date Calculator helps illustrate this concept.
How Soon After My AAP Year Begins Should I Complete My AAP?
As a rule of thumb based on audit deadlines, you should try to finish your annual AAP within 30 days of the beginning of your AAP year. This means that if your AAP year begins on January 1, you should aim to have it completed by February 1.
May I Change My AAP Year?
There are no requirements that companies keep the same AAP year, but companies may not have a gap in data analysis. This means that, for instance, if your AAP begins on January 1, 2023, and you wish to switch to a July 1, 2023 begin date, you should still prepare your January 1, 2023 AAP, but then complete a second AAP as of July 1, 2023 that will run through June 30, 2024.


Whom Should I Include in My AAP?

OFCCP’s regulations indicates under CFR 60-2.1(d) that: “Contractors must develop and maintain a written affirmative action program for each of their establishments. Each employee in the contractor’s workforce must be included in an affirmative action program.”

In other words, all employees at every location in a company’s workforce, whether at the facility that holds the contract or not, must be included in an AAP.

What is an “Employee?”
The OFCCP does not define “employee” in the regulations, but it does state in its preamble to 60-2 that it, “did not intend for this provision to be read as including only full time employees…” and that, “…the term ‘employees’ is broad enough to include part-time, temporary and full time employees.” In other words, assume that all of your employees, whether contributing to the government contract or not, must be in an AAP. The OFCCP’s Federal Contract Compliance Manual’s frequently asked questions do further attempt to define the employer-employee relationship by deferring to what are called the Darden Factors. Read more about the Darden Factors and the Employer-Employee Relationship if you have doubts about whether a type of employee should be included in your AAP.
Only some of my employees work on the government contract – do I really need to include everyone?
Yes. The regulations are clear that every employee in a contractor’s workforce must be included in an AAP; this includes the employees not only at the location that holds the government contract, but all other locations’ employees regardless of whether the location contributes to the government contract. If you have doubts, review the Single Entity Test with your company’s counsel.


How Many AAPs Should I Prepare?

Even if a non-corporate/ headquarter location holds the federal government contract, every entity under the corporate/ headquarter umbrella is subject to affirmative action regulations, and must prepare an annual AAP; however, if you have doubts that every entity under the company’s corporate/ headquarter umbrella must have its own AAP, read through the Single Entity Test and consult with your company’s attorney to decide.

Single Entity Test

You may have had this thought while learning about AAP regulations:

We don’t do any government work here. Federal Government work is performed in some other division in another state. Are we subject to the equal employment laws enforced by OFCCP?

The answer is Yes. Generally speaking, once it has been determined that a business or organization is subject to the civil rights requirements enforced by OFCCP, all of the business’s or organization’s establishments or facilities will be subject to the same regulatory requirements, regardless of where the Federal contract is to be performed.

In addition, some businesses or organizations that do not independently hold Government contracts/subcontracts may still be covered under the laws enforced by OFCCP if they are considered a “single entity” with a related business or organization that holds such contracts. In such instances, OFCCP uses a “single entity” test to determine whether the businesses or organizations are so closely related that they may constitute a single entity for purposes of OFCCP jurisdiction. The test requires OFCCP to consider whether:

  1. the entities have common ownership;
  2. the entities have common directors and/or officers;
  3. one entity has de facto day-to-day control over the other through policies, management or supervision of the entity’s operations;
  4. the personnel policies of the entities emanate from a common or centralized source; and
  5. the operations of the entities are dependent on each other, e.g., services are provided principally for the benefit of one entity by another and/or both entities share management, offices, or other services.

The test focuses primarily on whether the ownership, management, and operations of the separate entities are, in fact, sufficiently interrelated to warrant treating them as an integrated enterprise or a single entity. A business or organization need not meet all five factors to be considered a single entity with a covered Federal contractor. However, there is growing recognition that centralized control over labor relations and personnel functions is the most important factor. By way of example, say that two entities are under common ownership, with a common board of directors, and have a central corporate office that determines and issues personnel policy for both entities, and generally manages most personnel-related issues for both entities. At the same time, the operations of the two entities are not particularly dependent on each other. Despite the fact that one of the factors did not apply, the four factors that did outweigh the one that did not, so that the two entities being analyzed will most likely be considered a single entity.

Location Thresholds

  • Federal government contractors must prepare an AAP for every location that has 50 or more employees. “Location” as viewed by OFCCP means ‘physical address,’ but the OFCCP unofficially allows the combination of locations of 50 or more employees into a single AAP provided that the locations share a geographic recruiting area.



  • Federal government contractors may opt to prepare separate AAPs for locations of fewer than 50 employees, or you may choose to roll up employees and employment activity records at those locations. Locations of fewer than 50 employees includes remote, field, and/or telecommuting individuals, but it really does not make sense to prepare AAPs for one-person locations.

  • Federal government contractors may opt to prepare Functional Affirmative Action Plans that comprise employees by organizational functions rather than by locations. To read more about and determine whether FAAPs make sense for your company, click below.


Functional Affirmative Action Plans

Aside from by establishment, the only other method of forming affirmative action plans is by function.

If a contractor wishes to establish an affirmative action program other than by establishment, the contractor may reach agreement with OFCCP on the development and use of affirmative action programs based on functional or business units.
CFR 60-2.1(4)

AAPs established on the basis of functional or business units are referred to as Functional Affirmative Action Plans (FAAPs). In order to establish a FAAP, government contractors must enter into a FAAP agreement with the OFCCP, and should keep in mind that the OFCCP audits FAAPs by location, as it does for AAPs by establishment.

Example FAAPs

In the illustration below, our Sample Company has five different functions, some of which are located in more than one establishment. Our Sample Company has decided to form FAAPs as follows:
  • the Management FAAP will include management employees residing in California, Florida, Texas, and Puerto Rico
  • the Sales FAAP will include sales employees residing in California, Florida, and Texas
  • the Production FAAP will include production employees residing in only Puerto Rico
  • the Engineering FAAP will include engineering employees residing in Florida and Puerto Rico
  • the Executive, Finance, and HR functions all reside in one facility, so that site will have an establishment AAP

Sample Company's FAAPsSample Company's FAAPs

The OFCCP published a directive that provides guidance to contractors on enforcement and compliance policy or procedures regarding FAAPs. Directive 2013-01 Revision 2 still requires that contractors submit to the OFCCP a request for an FAAP agreement, and it clarifies other roles and responsibilities of both contractors and OFCCP staff.

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